Frugal Innovation

Scarcity has become a major driver for innovation. The bleaker economy of the last few years has thrust companies, organizations, universities – and entire countries – into an austerity mode. Innovation is more critical than ever, yet many established organizations, especially the ones that institutionalized their innovation process, don’t have the agility to respond. The things they’re used to, money and time, are no longer abundant.

In the context of this changed economy when it seems everything has to be faster, better and cheaper, there’s a type of innovator who’s thriving: the jugaad innovator. Jugaad (pronounced “Joo-gaard”) is a Hindi word that translates not only to a noun – it’s a fix, a work-around, an innovative solution – but it also encompasses an entire spirit of resourcefulness and resilience.

An example: After an earthquake devastated his inventory of clay pots used for chilling water, Mansukhbhai Prajapati read a newspaper headline referring to his rubble as the “poor man’s fridge.” This gave him the idea to make a refrigerator out of clay for families who can’t afford one – and can’t afford the electricity, either. The low cost clay fridge, that cools using water and is 100% biodegradable, sells for 2,000 rupees, roughly ₤25 or $40. His growing business has also created new jobs for his previously unemployed neighbors. Out of a catastrophe came an opportunity to solve a serious problem and to involve a larger community in the solution.

The term jugaad has gently seeped into the nomenclature of the business press in the last few years, and a just-published book, Jugaad Innovation, by Navi Radjou, Jaideep Prabhu and Simone Ahuja describes its origins in India, but draws a parallel to the same frugal entrepreneurialism in other developing countries and how the notion of jugaad is being imported into organizations in the developed western countries as well.

The Philosophy of Jugaad

There are six principles of frugal innovation:

Seek opportunity in adversity.
The jugaad innovator uses problems to create innovation. The harsh realities and obstacles they encounter become launch pads for new products and services. They don’t succeed in spite of obstacles, they succeed because of them.

Do more with less.
Jugaad innovators have to be frugal. They lack money, raw materials, power, knowledge, and experience. They can’t even count on a basic infrastructure. But what they lack in resources they make up for in resourcefulness. They reuse and recycle, combine existing technologies to make new solutions, leverage what exists and expand it. It’s the only way they can survive, and remarkably, they use this to thrive.

Think and act flexibly.
Jugaad requires improvisation rather than strategic planning and forecasting. These entrepreneurs jump in with a prototype, and correct their course as they go along. When things go wrong, they adapt. (Refer to principle #1, adversity as opportunity.) They start with small budgets, take small risks, and can quickly correct and reboot after small failures.

Keep it simple.
As the west grows more and more technologically sophisticated, the jugaad innovators are looking for low-tech “good enough” solutions that are simple to make, use and repair. These inventions are extremely functional, without the bells and whistles of design innovation. But the simplicity doesn’t come from removing features from high-end solutions. They design from the ground up, taking into consideration the most basic needs of the user.

Include the margin.
Jugaad innovators can see, first-hand, what the unserved or underserved market needs – more often than not they’re part of it. They are driven by a sense of fairness, that everyone is entitled to basic services like education, information, health care, banking and energy. Despite C.K. Prahalad‘s prophecies about the business opportunities in the Bottom of the Pyramid, western firms often approach the marginalized market in terms of a corporate social responsibility initiative rather than a legitimate profit center, classifying it as good works instead of good business. The jugaad good-work-is-good-business attitude of jugaad innovators resonates with their customers.

Follow your heart.
Jugaad innovators do not rely on formalized market research and focus groups. Their first-hand knowledge and intuition about the needs of a customer is fueled by empathy. Financial gain is important, but perhaps secondary to the desire to solve a nagging problem that creates a challenge for their community. On-line jugaad bulletin boards are used to share innovations. People seeking solutions can also post, hunting for collaborators to help solve their problems.

Better, Cheaper, Faster

The mantra of better, cheaper, faster is not limited to the developing world. Knowinnovation works with universities and organizations that are confronted with major budget cuts and austerity measures. We’re asking ourselves how can we help them achieve the innovation they seek despite their constraints? One area we’re putting a lot of energy: developing our virtual innovation lab so people can experience the multi-disciplinary, multi-institutional methods of our workshops, but without the time and carbon costs of traveling and being away from other responsibilities.

Even thinking about scenarios where we have the resources to innovate, might we push the envelope voluntarily toward resource management? What if we impose a constraint that doesn’t exist? Could we come up with a more sustainable solution if we pretended we had to?

We’re also wondering how to encourage scientists to engage with jugaad inventions, and to look at how their knowledge might improve the systems effectiveness – without removing the ability of local people – to enhance the solutions. Like how to find better materials, or new ways of using materials, to improve performance.

The Jugaad Way

A few tips from Jugaad Innovation about how to embrace the mindset of the frugal innovator:

Prioritize the principles you want to adopt. Not all of them may apply to your situation. Which ones resonate the most with you? Start there.

Don’t consider jugaad as an organizational change. It’s not a top-down command, but rather a philosophy that inspires individuals across the organization to act upon their hunches, passions and moral sensibility.

Find the mavericks for whom this is natural behavior. Acknowledge and celebrate their achievements.

When the authors described the stereotypical jugaad innovator, this particular talent stood out: the capacity for detached engagement. These individuals seem to be deeply motivated and embroiled in their projects, but they don’t let failure or success impact their passion. This relentless resilience strikes us as the core element of their success. They are frugal about everything, except their passion.